This company has conducted the Program Optimization and Budget Evaluation (PROBE) Interface Study since December 1974. The overall study objective has been to define major problem areas and develop solutions essential to bring discipline to the Planning, Programming, and Budgeting System (PPBS) processes. Section 1 of this interim report provides background information on the study as a whole. Remaining sections address the specific task of further defining major deficiencies impacting the PPBS, developing appropriate solutions, and defining a feasible subset of the total PPBS process which can be fulfilled by PROBE. An alternative PROBE subset is defined in detail in Section 5. Section 6 describes other completed and on-going PPBS/PROBE-related studies and links them to specific problem areas being addressed.